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en-usTechdirt. Stories filed under "settlement"https://ii.techdirt.com/s/t/i/td-88x31.gifhttps://www.techdirt.com/Mon, 12 Feb 2018 09:31:00 PSTWaymo And Uber's Settlement Is A Good Thing: Focus On Innovating, Not LitigatingMike Masnickhttps://www.techdirt.com/articles/20180209/15155939201/waymo-ubers-settlement-is-good-thing-focus-innovating-not-litigating.shtml
https://www.techdirt.com/articles/20180209/15155939201/waymo-ubers-settlement-is-good-thing-focus-innovating-not-litigating.shtml
Back in December, right before the Waymo/Uber trial was supposed to begin (before it got delayed due to an unexpected bombshell about withholding evidence that... never actually came up at the trial), I had a discussion with another reporter about the case, in which we each expressed our surprise that a settlement hadn't been worked out before going to trial. It seemed as though part of the case was really about the two companies really disliking each other, rather than there being a really strong legal case.

A year ago, when the case was filed, I expressed disappointment at seeing Google filing this kind of lawsuit. My concern was mainly over the patent part of the case (which were dropped pretty early on), and the fact that Google, historically, had shied away from suing competitors over patents, tending to mostly use them defensively. But I had concerns about the "trade secrets" parts of the case as well. While there does seem to be fairly clear evidence that Anthony Levandowski -- the ex-Google employee at the heart of the discussion -- did some sketchy things in the process of leaving Google, starting Otto, and quickly selling Otto to Uber, the case still felt a lot like a backdoor attempt to hold back employee mobility.

As we've discussed for many years, a huge part of the reason for the success of Silicon Valley in dominating the innovation world has to do with the ease of employee mobility. Repeated studies have shown that the fact that employees can switch jobs easily, or start their own companies easily, is a key factor in driving innovation forward. It's the sharing and interplay of ideas that allows the entire industry to tackle big problems. Individual firms may compete around those big breakthroughs, but it's the combined knowledge, ideas, and perspective sharing that results in the big breakthroughs.

And even though that's widely known, tech companies have an unfortunate history of trying to stop employees from going to competitors. While non-competes have been ruled out in California, a few years back there was a big scandal over tech companies having illegal handshake agreements not to poach employees from one another. It was a good thing to see the companies fined for such practices.

However, the latest move is to use "trade secrets" claims as way to effectively get the same thing done. The mere threat of lawsuits can stop companies from hiring employees, and can limit an employee's ability to find a new job somewhere else. That should concern us all.

However, in this lawsuit, everything was turned a bit upside down. Part of it was that there did appear to be some outrageous behavior by Levandowski. Part of it was that, frankly, there are few companies out there disliked as much as Uber. It does seem that if it were almost any other company on the planet, many more people would have been rooting against Google as the big incumbent suing a smaller competitor. But, in this case, many many people seemed to be rooting for Google out of a general dislike of Uber itself.

My own fear was that this general idea of "Uber = bad" combined with "Levandowski doing sketchy things" could lead to a bad ruling which would then be used to limit employee mobility in much more sympathetic settings. Thankfully, that seems unlikely to happen. As Sarah Jeong (who's coverage of this case was absolutely worth following) noted, despite all the rhetoric, it wasn't at all clear that Waymo proved its case. Lots of people wanted Google/Waymo to win for emotional reasons, but the legal evidence wasn't clearly there.

And now the case is over. As the trial was set to continue Friday morning, it was announced that the two parties had reached a settlement, in which Uber basically hands over a small chunk of equity to Waymo (less than Waymo first tried to get, but still significant). As Jeong notes in another article, both sides had ample reasons to settle -- but the best reason of all to settle is so that they can focus on just competing in the market, rather than the courtroom and in not setting bad and dangerous precedent concerning employee mobility in an industry where that's vital.

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]]>took-too-long-alreadyhttps://www.techdirt.com/comment_rss.php?sid=20180209/15155939201Thu, 14 Sep 2017 10:49:43 PDTLawyer: Without The Monkey's Approval, PETA Can't Settle Monkey Selfie CaseMike Masnickhttps://www.techdirt.com/articles/20170913/17465338205/lawyer-without-monkeys-approval-peta-cant-settle-monkey-selfie-case.shtml
https://www.techdirt.com/articles/20170913/17465338205/lawyer-without-monkeys-approval-peta-cant-settle-monkey-selfie-case.shtml
Ted Frank is a well-respected lawyer who has heroically dedicated much of his career to stopping bad legal practices, including sketchy settlements in class action lawsuits. Now he's taking action in another case involving a sketchy settlement: the monkey selfie case. As we highlighted earlier this week, while it was no surprise that PETA and photographer David Slater worked out a settlement agreement to end the ridiculous lawsuit PETA had filed, it was deeply concerning that part of the settlement involved PETA demanding that the original district court ruling -- the one saying, clearly, that animals don't get copyrights -- should be thrown out.

It took just a few days for Frank, on behalf of CEI, to file a wonderful and hilarious amicus brief with the court. There are a bunch of reasons why vacatur is improper here, but the real beauty of this brief is in pointing out that Naruto -- the monkey -- has been left out of the settlement, and thus not "all parties" have agreed. No, really.

PETA continued to assert that it acted as Naruto’s next friend before this Court, after Dr. Engelhardt voluntarily dismissed her appeal before briefs were filed.... The defendants argued that because Dr. Engelhardt was the only person pleaded to have any relationship with Naruto, PETA could not demonstrate the “significant relationship” required to establish next friend standing.... In response, PETA again asserted in writing and at oral argument that it acts as Naruto’s next friend....

Incredibly, PETA now represents that it entered into settlement with the defendants alone—without Naruto.... The settlement instead “resolves all disputes arising out of this litigation as between PETA and Defendants.”... This statement makes no sense. PETA did not have claims against the defendants. PETA argued repeatedly it was a next friend, a nominal party. For what their worth, all claims arising out of this litigation belong to the sole plaintiff, Naruto....

The underlying complaint does not plead a case or controversy between PETA and defendants, and this alone bars vacatur. Without standing, PETA may not move for vacatur. It does not matter that the defendants half-heartedly moved for vacatur under their settlement agreement “without joining or taking any position as to the bases for that request.”... The losing party—Naruto—must carry the burden of proving “equitable entitlement to the extraordinary remedy of vacatur.”...

No Naruto, no standing, no vacatur.

No Naruto, no standing, no vacatur. What a world we live in.

PETA’s too-clever-by-half argument simply does not work. PETA cannot claim to be a qualified next friend, then pretend to be unqualified when it suits them for the limited purpose of vacating an unfavorable precedent. Their position is especially untenable because PETA still “contends that it can satisfy the Next Friend requirements, or should be permitted the opportunity to do so before the district court, if the appeal is not dismissed.”

Alternatively, Frank argues that since Naruto is not technically a part of the settlement, perhaps the appeals court should reject the settlement and issue its opinion anyway:

Alternatively, if the Court takes PETA’s argument literally, and if PETA agreed only to stop acting as next friend for Naruto, leaving the monkey without an advocate, such a selfish settlement would not extinguish Naruto’s appeal. A stipulation signed only on behalf of the next friend (a nominal party) cannot moot the underlying controversy with the actual party. To the extent that PETA insists this occurred, they have simply ceased to adequately represent their supposed friend Naruto. If so, PETA’s stipulation should be disregarded.

Frank also takes a stab at PETA's whole "next friend" argument and why it's so silly in a footnote. First, he notes that if the court is concerned that Naruto is now "friendless" at the court, it could appoint a guardian ad litem, with the following footnote mocking PETA's claim to "next friend" status.

The Competitive Enterprise Institute has as much of a personal relationship with Naruto as PETA pleaded (i.e., none), so might plausibly serve the role as well as PETA has. However, any next friend or guardian should have a bona fide personal and non-ideological interest in the incompetent person—putting aside the question of whether animals may be persons under Fed. R. Civ. Proc. 17.

And, of course, who knows if Naruto (or some other "next friend") won't sue again:

In any event, if Naruto’s claims were indeed not settled by PETA, vacatur should be denied because “Naruto” (that is, someone claiming to be his “next friend”) would remain free to file suit again for further acts of alleged infringement.

While this is a bit of a throwaway line, it's actually important -- and it's one that David Slater should pay attention to. Allowing PETA to toss out the lower court settlement might not end his legal troubles over this matter. Anyone else alleging to be Naruto's "next friend" might go right back to court.

Finally, Frank notes that just because the parties have announced a settlement, that doesn't mean the court can't reject it and issue a ruling -- providing guidance to other courts in the circuit on this issue.

In Americana Art, the panel chose to issue an affirming opinion notwithstanding the dismissal because of the “opportunity to provide additional guidance to the district courts.”... PETA previously stated to this Court that the case presents “a question of first impression [and] the issue is not a trivial one.” ... Given the judicial resources already expended at the district-court and appellate level, the Court can rationally conclude, especially given that PETA is attempting to elide the question of whether it is or is not a “next friend,” that, if the Court is already close to a decision in this straightforward case, it should provide “guidance to the district courts” by issuing a decision that would not require much additional expenditure of judicial resources

I would be pleasantly surprised if the 9th Circuit actually keeps the case going and issues an opinion -- but at the very least, it shouldn't ditch the district court ruling.

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]]>has-the-monkey-settled?https://www.techdirt.com/comment_rss.php?sid=20170913/17465338205Tue, 12 Sep 2017 10:37:06 PDTMonkey Selfie Case Reaches Settlement -- But The Parties Want To Delete Ruling Saying Monkeys Can't Hold CopyrightMike Masnickhttps://www.techdirt.com/articles/20170912/07402438192/monkey-selfie-case-reaches-settlement-parties-want-to-delete-ruling-saying-monkeys-cant-hold-copyright.shtml
https://www.techdirt.com/articles/20170912/07402438192/monkey-selfie-case-reaches-settlement-parties-want-to-delete-ruling-saying-monkeys-cant-hold-copyright.shtml
For many years now, we've been covering the sometimes odd/sometimes dopey case of the monkey selfie and the various disputes over who holds the copyright (the pretty clear answer: no one owns the copyright, because the law only applies to humans). David Slater, the photographer whose camera the monkey used, has always claimed that he holds the copyright (and has, in the past, tried to blame us at Techdirt for pointing out that the law disagrees). A few years back, PETA, the publicity-hungry animal rights group, hired big time lawyers at Irell & Manella to argue (1) the monkey holds the copyright, not Slater, (2) PETA somehow magically can stand in for the monkey in court -- and sued Slater over it. Slater and I disagree over whether he holds the copyright, but on this we actually do agree: the monkey most certainly does not hold the copyright.

The district court ruled correctly that works created by monkeys are in the public domain and that PETA had no case. PETA appealed. Last month, we wrote that the case was likely to settle, because both sides were highly motivated to get it out of court. On Slater's side, he had told some reporters that the legal fight has left him broke (which bizarrely lead to a bunch of people blaming me, which still makes no sense), while PETA desperately wanted to settle because the hearing in the case made it abundantly clear that the appeals court was not buying its argument. Indeed, it appears that the judges hearing the case could barely contain laughter at the bananas argument made by PETA's lawyers.

So it comes as little surprise that the parties have released a joint statement saying they've settled the case and asking the court to dismiss the appeal. Part of the agreement is that Slater says he'll donate 25% of any future proceeds from the monkey selfie pictures to organizations that protect the habitat of macaque monkeys in Indonesia, which seems like a good cause.

But... there is a pretty clear problem with the proposed settlement. Not only are they asking the court to dismiss the case due to the settlement, the parties have also agreed to ask the court to vacate the district court's ruling saying that animals cannot copyright works they create. Basically, PETA and its high-priced lawyers lost really badly on a fundamental issue of copyright... and now they want to erase that precedent so they or others can try again. PETA is arguing, incredibly, that if the original ruling stands, it will unfairly bind the monkey Naruto:

Here, the settlement is between PETA and Defendants. Accordingly, under
Bonner Mall, PETA maintains that Naruto should not be “forced to acquiesce” to
the district court’s judgment that he lacks standing under the Copyright Act where
the appeal will be mooted by an agreement by PETA and PETA’s Next Friend
status is contested and undecided. Rather, PETA maintains that it would be just
and proper to vacate the judgment of the district court.

Wait. So PETA doesn't want Naruto -- the monkey that it claims to represent on no real basis, and who has absolutely no clue any of this is actually happening -- to be "forced to acquiesce" to the ruling? That's utter bullshit.

Of course, it's almost certainly not the real motivation here. The more likely reason is simply that PETA doesn't want that precedent on the books and there will likely be other cases in the very near future on other non-human created works. PETA's lawyers, Irell & Manella, may very well be trying to position themselves as the go-to lawyers on issues like who holds the copyright on AI-created works (answer again: no one), and having this ruling on the books, even at the district court level, would be inconvenient.

Hopefully the court will see through this and leave the ruling as is. Otherwise it seems likely that we'll be seeing a lot more of these kinds of cases. In the meantime, PETA also put a silly statement on its blog calling the case "groundbreaking." It was not groundbreaking. It was a stupid, nonsensical argument that was clearly not correct, and was basically laughed out of court. PETA says that this "sparked a massive international discussion about the need to extend fundamental rights to animals...." Except it did nothing of the sort.

Most of the press coverage you'll see about the case are just sort of laughing it off -- saying "oh that silly monkey selfie case has settled." But very few of them are reporting the request to vacate the lower court ruling. It's a bad idea and hopefully the court does not allow it to happen.

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]]>this-is-badhttps://www.techdirt.com/comment_rss.php?sid=20170912/07402438192Mon, 7 Aug 2017 09:30:50 PDTMonkey Selfie Case May Settle: PETA Knows It'll Lose, And The Photographer Is BrokeMike Masnickhttps://www.techdirt.com/articles/20170806/01003837941/monkey-selfie-case-may-settle-peta-knows-itll-lose-photographer-is-broke.shtml
https://www.techdirt.com/articles/20170806/01003837941/monkey-selfie-case-may-settle-peta-knows-itll-lose-photographer-is-broke.shtml
It may finally be ending. The dumbest copyright lawsuit we've seen in a long time (and that's saying a lot) about a silly topic. We've been covering the story of the monkey selfie from basically the very beginning (and often get mentioned in stories about it, as we'll discuss below). But, the story that began as a weird quirk of explaining how copyright law works -- and how many people don't believe it works the way it does -- got stupid in a hurry once PETA and the formerly respected law firm of Irell & Manella got involved. And, now, finally, the case may be ending in a settlement.

A settlement totally makes sense here, because the plaintiff knows it's going to lose in embarrassing fashion if the case moves forward, and the defendant is broke, in part because of this case (though some people -- including the photographer -- appear to be partially blaming us*). If you somehow haven't followed this story the very, very quick recap is that a photographer named David Slater went to Indonesia where he was taking photographs in a national park, and at some point at least one (and possibly more?) macaque monkeys played with his camera and took some photos with it, including some selfies, which were mildly amusing. As we noted in a long discussion on this, technically the photos are almost certainly in the public domain (read that post to learn why if you don't believe it). David Slater disagrees with this and insists the copyright is his, and has had various representatives at times send totally bogus and severely confused threat letters. However, nearly all serious legal commentary has recognized that the works are in the public domain. That's just how copyright law works, whether you like it or not.

Either way, there's one thing that Slater and I agree on: the monkey doesn't hold the copyright... and PETA (an organization that often seems to care more about publicity stunts than animals) two years ago kicked off a monumentally dumb lawsuit against Slater, claiming that the monkey held the copyright and that PETA represented the monkey. And, again, this can't be stated often enough: PETA brought on a previously respected copyright law firm, Irell & Manella, to handle this case and they proceeded to make some really crazy arguments, including suggesting that every work must have a copyright -- apparently writing the public domain right out of the law.

Either way, PETA lost badly in court, but still appealed. That appeal has not gone well. At a hearing last month, it appears that the judges could barely contain their laughter at just how stupid a lawsuit this really is. PETA knows it's going to lose and lose badly -- and thus has every incentive to settle this case before such a ruling is released.

As for Slater, well, he's been telling reporters that he's completely broke -- so clearly he has incentive to just get the case over with as well. And, I feel for him. Being sued over a completely bogus claim totally sucks. I know that all too well. So it's pretty sensible that all the parties in the lawsuit have told the court to hold off on ruling while they work out a settlement.

And, really, what a despicable case this was by PETA and Irell & Manella. Yes, I know that PETA's whole schtick is to do ridiculous publicity stunts, but this one had real costs. It wasted a bunch of time in the courts, and was really damaging to David Slater, who didn't deserve to be dragged into court by such an organization. One hopes that, at the very least, part of the settlement includes an apology.

* So, this is kind of a separate issue, but Slater occasionally points to Techdirt's articles about why the photos are in the public domain as part of the problem -- and the recent reporting on his claims of being broke have more or less repeated this. The first report we saw, in the Guardian, mentions us and Wikipedia as "refusing" to take the images down -- which... leaves out a big part of the story (i.e., it was in the context of explaining why the work was in the public domain under copyright law). We actually had a few angry people contact us over the Guardian story not realizing the details.

But that was nothing compared to what happened when the Daily Mail, the UK's worst newspaper, basically tried to rewrite the Guardian story and twisted our role even more:

His problems began when Californian-based blog Techdirt and the online encyclopedia Wikipedia (whose mission statement is 'to empower and engage people around the world to collect and develop educational content under a free licence or in the public domain') muscled in.

"Muscled in?" Guys, all we did was write (accurately, I may add!) about the copyright issues when a monkey takes a selfie. That's not "muscling in." That's journalism. The Daily Mail might want to try it some day.

They claimed the image was uncopyrightable because the monkey was the creator — and so they uploaded the picture onto their websites, free for anyone to use. To Dave, this was an assault on his livelihood.

Understandably, he asked Techdirt and Wikipedia to stop using the pictures — but they refused. Faced with little choice, Dave decided to sue for up to £18,000, saying: 'There's a lot more to copyright than who pushes the trigger.'

At least the Daily Mail mentions that we explained why the work is in the public domain, but they make it sound like we were the ones doing the initial distribution of the photo. That's crazy. It was all over the internet. In fact, uh, we first read about the monkey in the Daily Fucking Mail. Seriously. Go look at the link in our first story. You want to know where we first got the photograph? The Daily Mail. Yet now the Daily Mail is blaming us for making the photo available? Are you fucking kidding me?

And, I have no idea what the hell they're talking about saying that Slater sued us for £18,000. This is the first we've heard of it.

But, here's the thing: after the Daily Mail article went online, we started getting quite a bit of hate mail, accusing us of bankrupting Slater. I feel bad for Slater, as his situation sounds bad. But we didn't sue him. We didn't take away his livelihood. We explained the law. That's it. You might not like the law, but the law would have been the same whether or not we wrote about it. Slater wouldn't have had the copyright either way. It's fair to blame PETA for hurting Slater, because they sued him for no damn reason at all. But we just reported on the situation accurately -- something it would be nice if the Daily Mail tried once in a while.

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]]>so settlement makes sensehttps://www.techdirt.com/comment_rss.php?sid=20170806/01003837941Mon, 25 Jul 2016 13:09:06 PDTIsoHunt Settles The Last Of Its Lawsuits, Laughably Agrees To 'Pay' Recording Industry $66 MillionMike Masnickhttps://www.techdirt.com/articles/20160724/07345335051/isohunt-settles-last-lawsuits-laughably-agrees-to-pay-recording-industry-66-million.shtml
https://www.techdirt.com/articles/20160724/07345335051/isohunt-settles-last-lawsuits-laughably-agrees-to-pay-recording-industry-66-million.shtmlshut down and to "pay" Hollywood studios $110 million. The number was a joke, because IsoHunt and its creator didn't have $110 million. It's just that the legacy copyright players always like to end these lawsuits with a giant headline grabbing number, while they've quietly agreed to accept very little, if any, actual money (and whatever money they do receive is not then distributed to any artists). The Sony email hack a few years back revealed that the industry does this frequently in closing out its lawsuits against search engines. IsoHunt was more or less forced into that settlement after the MPAA misled the court about IsoHunt's actions. But the court bought it, and the IsoHunt court rulings have created some really unfortunate precedents. It's the case that the legacy players always point to, because it's the only case to find that a search engine platform has "red flag knowledge" of copyright infringement without having specific knowledge of infringing files.

The case against Hollywood, however, wasn't the only case IsoHunt was fighting. It also was fighting the recording industry up in Canada in a case that began with IsoHunt filing for declaratory judgment that it didn't infringe in Canada, all the way back in 2008. The Canadian Recording Industry Association (CRIA), then sued back -- but did everything it could to keep the case out of the news because it was also fighting for new copyright laws in Canada... and part of its argument was that the existing Canadian copyright laws were inadequate to go after IsoHunt and similar sites.

And I want to congratulate both Hollywood and CRIA on their victories, in letting me off with fines of $110m and $66m, respectively. Thank you! Here’s to progress, and me leaving my life of innovative hobby to… something else?

He also declares victory in that he was never forced to give up any info on any IsoHunt users throughout all of this.

Either way, as with any other of these "victories" I'm still curious if either the recording or movie industries thinks these shut downs have actually caused anyone to go back to buying more of their products, or if people have just moved on to other ways of getting this kind of content?

Fung, meanwhile, also announced that he's working on a new product, which sounds like an attempt at using AI to get better search results to answer questions. He's given it the code-name AAG, which stands for the "App to Automate Googling." That suggests that he may receive a cease and desist from Google over trademark before too long. Hopefully, he still has the contact info for his lawyers...

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]]>i'm-sure-musicians-will-see-nothinghttps://www.techdirt.com/comment_rss.php?sid=20160724/07345335051Fri, 1 Jul 2016 10:40:03 PDTDish Agrees To Make Ad-Skipping DVR Less Useful In Settlement With Comcast, NBC UniversalKarl Bodehttps://www.techdirt.com/articles/20160617/08002134732/dish-agrees-to-make-ad-skipping-dvr-less-useful-settlement-with-comcast-nbc-universal.shtml
https://www.techdirt.com/articles/20160617/08002134732/dish-agrees-to-make-ad-skipping-dvr-less-useful-settlement-with-comcast-nbc-universal.shtmlsued Dish back in 2012, claiming that the ad-skipping technology embedded in its "Hopper" DVR violated copyright. CBS took this fight to some bizarre and troubling lengths, going so far as to pressure CBS-owned CNET to avoid reviewing the device and even demanding CNET back down from giving Hopper a CES award back in 2013.

In 2014, CBS and Disney both settled their suits, with Dish agreeing to cripple the ad-skipping technology for new programs, in exchange for streaming licensing for use by Sling TV. Fox continued to press on, and while Fox won on some contract issues regarding whether Dish could offer recorded content outside the home, it lost on most of its copyright claims -- settling with Dish earlier this year.

That only left Comcast NBC Universal, which held out longer in part because Dish (and Sling TV) are direct competitors to Comcast's own cable TV services, but also because the two sides were engaged in a larger debate over retransmission contracts. But even Comcast NBC Universal agreed to settle with Dish this week, finally bringing the legal fisticuffs to an end. As with the other settlements, Dish had to agree to cripple some of its ad-skipping DVR functionality if it wanted to not only settle the case, but get a hold of NBC content for streaming video:

"On Thursday, the last of the lawsuits, the one that was filed by NBC, was stipulated for dismissal. The parties have reached a settlement that will limit ad-skipping until after seven days from a show's broadcast airing. According to a statement from an NBCU spokesperson, "NBCUniversal and DISH Network have reached an agreement resulting in the dismissal of all pending litigation between the two companies, including disputes over the AutoHop and PrimeTime Anytime features."

That puts to bed a multi-million-dollar legal battle that raged for four years -- all because Dish made it easier for consumers to do something they were doing anyway. And while it's great this particularly stupid saga has finally been put to bed, it's obviously only a matter of time before broadcaster lawyers find some new, consumer-friendly advancement they'd prefer didn't exist.

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]]>dumb,-protracted-waste-of-moneyhttps://www.techdirt.com/comment_rss.php?sid=20160617/08002134732Thu, 23 Jun 2016 06:32:00 PDTSony Settlement Gives PS3 Owners $9 After Company Made Console Less Useful Via Firmware UpdateKarl Bodehttps://www.techdirt.com/articles/20160621/12070034775/sony-settlement-gives-ps3-owners-9-after-company-made-console-less-useful-via-firmware-update.shtml
https://www.techdirt.com/articles/20160621/12070034775/sony-settlement-gives-ps3-owners-9-after-company-made-console-less-useful-via-firmware-update.shtmlarbitrarily disappear on your devices, and you no longer really own a wide variety of hardware that can be dramatically changed (often for the worse) via firmware update months or years after purchase. If you're extra lucky, you'll shell out $300 for a piece of hardware that one year later simply won't work at all. With intelligent automobiles and the rise of the internet-of-not-so-smart things, that's more true now than ever.

Case in point: back in 2010 we noted how Sony issued several firmware updates for its Playstation 3 gaming console that effectively made the console less useful. One specifically (PS3 software update 3.21) removed the console owner's ability to load alternative operating systems like Linux. But tinkerers being tinkerers, some users found ways to use the feature to expand the console's functionality in all kinds of creative ways. Fearing a loss of control and potential spike in piracy, Sony decided to make the console significantly less useful.

Sony was ultimately sued via class action for the decision. After six years of litigation, Sony has agreed to settle the dispute by doling out a whopping $9 to each console owner that bought a PS3 based on Sony's promises to provide "Other OS" functionality, and $55 to each PS3 user that managed to get Linux running on the console. Like most class actions it's the attorneys who'll reap the most benefits, Sony doling out $2.25 million in attorneys' fees for the lawyers who brought suit (though it's worth noting even this wouldn't be possible today thanks to TOS mouse print banning class actions and requiring binding arbitration).

Sony's lawyers at several points tried to claim that the update was "voluntary," refusing to acknowledge that users that refused to install the firmware couldn't actually use it for much of anything:

"...Sony said the update was voluntary. However, without updating, console owners couldn't connect to the PlayStation Network, play any games online, play any games or Blu-ray movies that required the new firmware, play any files kept on a media server, or download any future updates. Before the settlement, Sony argued that its terms of service allowed it to remove the Other OS feature and that the functionality wasn't that big of a deal for most console owners."

Part of the settlement requires that PS3 owners show "some proof of their use of the Other OS functionality" -- which after six years may not be all that easy for impacted users. While it's nice to see PS3 owners get a little something after six years of litigation, the overall trend in technology remains one where consumers can't tinker with the hardware they "own," can't be sure the hardware will adhere to day one marketing promises, have no guarantees that the gear will even work even one year down the line, and can't sue if what they own is intentionally downgraded or crippled by the manufacturer. Progress!

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]]>just-rentinghttps://www.techdirt.com/comment_rss.php?sid=20160621/12070034775Mon, 7 Mar 2016 11:41:28 PSTVerizon Strikes $1.35 Million Settlement With FCC Over Its Use Of Stealth 'Zombie Cookies'Karl Bodehttps://www.techdirt.com/articles/20160307/09094633823/verizon-strikes-135-million-settlement-with-fcc-over-use-stealth-zombie-cookies.shtml
https://www.techdirt.com/articles/20160307/09094633823/verizon-strikes-135-million-settlement-with-fcc-over-use-stealth-zombie-cookies.shtmlstealth tracking technology. By embedding each packet with a unique identifier traffic header, or X-UIDH. Verizon and its marketing partners were not only able to ignore user browser preferences and track their behavior around the Internet, they were then able to use this technology to build detailed user profiles. Verizon Wireless launched and operated the technology for two years before security researchers even noticed the program, and it required another six months of public pressure for Verizon to even offer an opt-out option.

According to the FCC's full press announcement (pdf), the fairly measly $1.35 million settlement doesn't stop the program, which likely won't please many privacy advocates. Verizon Wireless will however need to transparently notify users of the system and get their explicit opt-in (a rare dinosaur in online tracking rules) consent before sharing any of this data with third parties. The FCC is quick to highlight how Verizon previously proclaimed the technology couldn't be abused by third parties to build detailed profiles of users -- right before it was.

The FCC's full order (pdf) indicates that the regulator is leaning heavily on both the transparency requirement embedded in the FCC's net neutrality rules, and the agency's authority under Title II of the Communications Act to enforce the settlement:

"Section 222 of the Communications Act imposes a duty on carriers to protect their customers’ proprietary information and use such information only for authorized purposes. It also expressly prohibits carriers that obtain proprietary information from other carriers for the provision of telecommunications services to use such information for any other purpose. Section 8.3 of the Commission’s rules, known as the Open Internet Transparency Rule, requires every fixed and mobile broadband Internet access provider to publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings."

When the FCC reclassified ISPs as common carriers under Title II, ISPs became subject to Title II’s Section 222 privacy protections regarding "customer proprietary network information" (CPNI). That portion of Title II was written specifically for phone companies, so the FCC is planning (prompted in large part by Verizon's behavior) to update the CPNI rules to create new broadband consumer privacy protections. While the FCC politely lauds Verizon's cooperation in the investigation, these kinds of consumer protections are precisely what Verizon was trying to stop when it sued to cripple net neutrality (both in 2010 and again last year).

Granted Verizon could have easily avoided the new privacy rules. It has argued for years that tougher privacy protections for broadband weren't necessary because the industry could self-regulate. And regulators appeared to buy that claim for a while. But Verizon's decision to covertly fiddle with packets and track tens of millions of customers without bothering to tell any of them indicates just how well that plan actually worked in practice.

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]]>comes-around-goes-aroundhttps://www.techdirt.com/comment_rss.php?sid=20160307/09094633823Tue, 9 Feb 2016 10:38:39 PSTWarner To Pay $14 Million In 'Happy Birthday' Settlement; Plaintiffs Ask For Declaration That Song Is In Public DomainTim Cushinghttps://www.techdirt.com/articles/20160209/07305133557/warner-to-pay-14-million-happy-birthday-settlement-plaintiffs-ask-declaration-that-song-is-public-domain.shtml
https://www.techdirt.com/articles/20160209/07305133557/warner-to-pay-14-million-happy-birthday-settlement-plaintiffs-ask-declaration-that-song-is-public-domain.shtml
A large settlement is on the way in the "Happy Birthday" lawsuit. Eriq Gardner of the The Hollywood Reporter has the news:

According to a court filing on Monday, music publisher Warner/Chappell will pay $14 million to end a lawsuit challenging its hold on the English language's most popular song, "Happy Birthday to You."

This is indeed a large payoff, one that indicates Warner/Chappell is not willing to test the merits of its case in front of a jury. The merits of the case, of course, are pretty much some random assertions with little documentation to back them up, but assertions that have, nonetheless, allowed Warner to obtain an estimated $50 million in licensing fees over the years. The $14 million Warner will pay is roughly in line with what it expected to make during the remaining years of the copyright term.

Warners was expecting to have "Happy Birthday" under copyright until 2030. An IP valuation expert retained by the plaintiffs estimated that the song was to reap between $14 million to $16.5 million in the next 15 years.

$4.62 million will be headed to the plaintiffs' attorneys with the rest being split among qualifying members of the class. But what's far more interesting is what the plaintiffs have asked the judge to approve.

The Settlement includes an express agreement by Defendants and the Intervenors to forego collecting any more fees for use of the Song, saving the Settlement Class millions of dollars. In addition, if approved by the Court, by declaring the Song to be in the public domain, the Settlement will end more than 80 years of uncertainty regarding the disputed copyright.

As it stands now, the ownership of the song is still up in the air. Warner doesn't own it but no definitive declaration has been made as to who holds the rights. Lots of people made the assumption that Warner's lack of ownership = public domain, but that's not what the court has determined to this point. If the court pursues this -- and the information compiled to this point points to this conclusion -- we could see "Happy Birthday" finally remanded to the public domain.

If the court decides this isn't going to be part of the agreement, the song will still reside in legal limbo. All anyone will know for sure is that Warner won't be coming after them for using the song. But the heirs of Patty and Jessica Hill -- the sisters who wrote the lyrics -- might. The charity run by the heirs has already entered a motion to intervene, claiming if Warner doesn't own, then it does. If the judge declares the song to belong to the public domain, that's $14-16 million the heirs won't be collecting. It might go the plaintiffs' way, considering the judge's decision suggested the Hill's abandoned the copyright years ago (and may not have actually written the lyrics, either). There's a substantial amount of money at stake here and it's highly unlikely the Hills' heirs will let it go without a fight -- even if it's nowhere near certain they have any claim to the copyright at all.

However, the robocalling/TCPA claim remained, and after bringing in a third party to help the two sides negotiate, it appears that they've reached a settlement agreement that has been presented to the judge for approval. According to the proposed settlement, the defendants will have to cough up $450,000, and members of the class (i.e., those who received Rightscorp robocalls to their mobile phones) can claim up to $100 each from the pool of money. Perhaps more interesting is that, so long as those class members sign an "Affidavit of
Non-Infringement," then Righscorp promises not to pursue them for any copyright infringement claims. Apparently, this actually applies to members of the class who don't even make a claim for any money.

Defendants will contribute $450,000 to the Settlement Fund. Each
Qualified Class member who timely submits a claim may receive a payment of up to
$100.00 subject to the following condition. The Settlement Agreement provides that
Defendants will release any and all alleged claims or counterclaims for copyright
infringement against Settlement Class Members who timely execute an Affidavit of
Non-Infringement. The value of the total infringement releases is estimated to fall
between $94.8 million and $19 billion in total statutory damages.

That last number is a bunch of hogwash. It's just using the ridiculous statutory damages numbers to put a value on the promises to drop any copyright claims, but since Rightscorp never actually sues anyone, the statutory damages are meaningless. The idea behind it, though, is to show why the amount is lower than what the TCPA prescribes for violations of robocalling rules. Either way, this at least gets a bunch of folks out of Rightscorp's crosshairs. Rightscorp also promises to prevent future such robocalling, which may somewhat limit its ability to keep up its trolling operation.

It's not clear who exactly is paying the $450,000. Even though Righscorp is the real culprit, the much bigger pocketed Warner Bros. Entertainment and BMG are both defendants as well, so it wouldn't surprise me to discover that the actual money comes from them. However, maybe it will make them think twice about associating with trolling lowlifes like Rightscorp. This isn't final yet, as the court still needs to approve it -- but courts generally approve these kinds of settlements just to get the cases off the docket. So unless someone raises serious issues with it, it's likely to come to pass.

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]]>well,-it's-somethinghttps://www.techdirt.com/comment_rss.php?sid=20160112/22302333318Mon, 30 Nov 2015 14:04:09 PSTMicrosoft Lobbying Group Forces 'Pirate' To Get 200,000 Views On Anti-Piracy Video... Whole Thing BackfiresMike Masnickhttps://www.techdirt.com/articles/20151128/00032932934/microsoft-lobbying-group-forces-pirate-to-get-200000-views-anti-piracy-video-whole-thing-backfires.shtml
https://www.techdirt.com/articles/20151128/00032932934/microsoft-lobbying-group-forces-pirate-to-get-200000-views-anti-piracy-video-whole-thing-backfires.shtmlbeen mocked and parodied. And yet, if you talk to politicians and industry folks, they still seem to think that "more education" will magically work next time. One can only wonder what the hell the geniuses at the Software Alliance (the BSA -- which used to be the "Business Software Alliance" but has dropped the "Business" part, but not the "B" in its name) were thinking when they decided to "settle" with a guy who apparently uploaded some Microsoft software in the Czech Republic. The terms of the settlement required him to take part in a "professionally produced" anti-piracy video and that the video needed to get 200,000 views on YouTube or he might face having to pay damages in court.

The BSA is a well-known front for Microsoft, and has a long history of rather ridiculous claims about "piracy," so I guess it's little surprise that it's now engaged in out and out propaganda, but done so badly that it's turned the whole thing into a laughingstock. The whole "compelled speech" aspect of the settlement, including the requirement to get so many views, strikes basically everyone as ridiculous and stupid. Press attention has of course propelled the video to well over 200,000 thousand views at this point, and many of the YouTube comments are completely mocking the campaign -- and noting that they're watching the video to help the accused be let off the hook. The video is in Czech, but even so it's hilarious. It has the same sort of ominous production values as the old "You wouldn't download a car!" ads that have been mocked for years as well:

It really highlights just how out of touch folks at the BSA are, in that anyone actually thought this kind of thing would help it in any way, rather than making it a continued laughingstock.

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]]>'education' campaignhttps://www.techdirt.com/comment_rss.php?sid=20151128/00032932934Fri, 23 Oct 2015 14:48:56 PDTSo How Much Of The $90 Million Pandora Is Paying RIAA Labels To Settle Lawsuit Will Go To Artists?Mike Masnickhttps://www.techdirt.com/articles/20151022/17065832601/so-how-much-90-million-pandora-is-paying-riaa-labels-to-settle-lawsuit-will-go-to-artists.shtml
https://www.techdirt.com/articles/20151022/17065832601/so-how-much-90-million-pandora-is-paying-riaa-labels-to-settle-lawsuit-will-go-to-artists.shtmlsettling the lawsuit filed against it by the RIAA labels over playing pre-1972 sound recordings, Pandora has now done the same, agreeing to pay $90 million to have the lawsuit go away. In both cases, the companies recognized that, while the law was unclear and some lawsuits had gone both ways, it was probably a lot easier in the long run to just pay up than face the uncertainty and the possibility of much larger fees. Of course, both companies do still face some individual lawsuits, such as the ones by Flo & Eddie (the company behind The Turtles) who kicked off this lawsuit craze.

But... there is still a big question. As with pretty much any of these lawsuits filed by the RIAA or MPAA and its members, when they come to a settlement, how much of that money actually gets passed along to the individual creators? In the past, the answer has been slim to none with vague answers about how the money would go into some general pool, and the answer may be similar here. Eriq Gardner at the Hollywood Reporter did the heavy lifting, and got the slightly vague answers from the labels:

For example, will the proceeds of the settlement be shared by the major labels with their recording artists? What share? Upon a request for comment, an RIAA spokesperson said it was a question best directed towards the labels themselves. We've reached out. According to a Sony insider, the label intends to share proceeds in the standard way, analogous to how money from SoundExchange is shared. The source acknowledges that the mechanism is still being worked out. Another source says that Universal intends to process money directly through SoundExchange, a digital royalty collection outfit. A Warner Music spokesperson says the "the artist share [is] being distributed through SoundExchange."

So, they're basically passing the buck to SoundExchange, which handles royalties for Pandora and other digital streaming services, and has an unfortunate history of not being able to find the artists it's supposed to be paying (though, it's been much better in the past few years). But, even so, it's not clear how SoundExchange will divvy up the money, and how much will just be going directly back to the labels themselves.

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]]>we're-waiting...https://www.techdirt.com/comment_rss.php?sid=20151022/17065832601Thu, 28 Aug 2014 20:40:07 PDTKatherine Heigl Drops Her Lawsuit Against Duane ReadeTimothy Geignerhttps://www.techdirt.com/articles/20140827/16111528345/katherine-heigl-drops-her-lawsuit-against-duane-reade.shtml
https://www.techdirt.com/articles/20140827/16111528345/katherine-heigl-drops-her-lawsuit-against-duane-reade.shtmllawsuit filed by Katherine Heigl after Duane Reade, a drug store chain, tweeted out a photo of Heigl shopping at one of its stores. Under the auspices of publicity rights and the corollary idea that celebrities are simply better people with more legal privileges than the rest of us, Heigl wanted six-million dollars for the following tweet.

At the time, we noted that despite New York publicity rights laws being among the most tyrannical, it seemed strange for a lawsuit to be filed against a company simply for showing, you know, a thing that happened. While Heigl also claimed that this was a form of advertising, it's still just the accurate representation of something that occurred, which makes the whole advertising claim sort of silly.

Papers to dismiss the lawsuit were submitted in New York federal court on Tuesday. The dismissal comes with prejudice, meaning that Heigl can't later sue again over Duane Reade's tweet and Facebook post. No terms were revealed in court papers, but Heigl's attorney provides at least some detail.

"Katherine Heigl and Duane Reade have worked out a mutually beneficial agreement," says Peter Haviland at Ballard Spahr. "Ms. Heigl has voluntarily dismissed her lawsuit, and Duane Reade has made a contribution to benefit the Jason Debus Heigl Foundation. The parties have agreed to keep the terms of the agreement confidential."

There's no way to be sure that Duane Reade didn't drop six million off at Heigl's charity, but I doubt it. Either way, it's sort of a shame to see the company run away from challenging the insanity of the claims in the original lawsuit. Publicity rights are beginning to result in ever-more ramped-up legal cases that anyone with a modicum of common sense will recognize as silly. It was a picture of Heigl shopping at a store. Somehow that resulted in the store having to settle and contribute to a celebrity's charity of choice? Come on now.

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]]>dropping-spreehttps://www.techdirt.com/comment_rss.php?sid=20140827/16111528345Wed, 20 Aug 2014 08:02:31 PDTNYPD Settles Case In Which It Arrested Guy For Recording Stop And Frisk, Pays $125,000Mike Masnickhttps://www.techdirt.com/articles/20140819/17242728260/nypd-settles-case-which-it-arrested-guy-recording-stop-frisk-pays-125000.shtml
https://www.techdirt.com/articles/20140819/17242728260/nypd-settles-case-which-it-arrested-guy-recording-stop-frisk-pays-125000.shtmlSimon Glik case, it appears that the NYPD (under new management!) decided to do its best to settle the case and get it off the books. They're paying $125,000 to Dick George, who recorded police doing one of its infamous stop-and-frisks. According to George's lawsuit, not only did the police arrest George and delete the photos from his camera (after he told the kids who were stopped and frisked to get the cops' badge numbers next time), the police flat out knew what they were doing was illegal -- telling George to sue the police:

“Now we’re going to give you what you deserve for meddling in our business and when we finish with you, you can sue the city for $5 million and get rich, we don’t care,” Lt. Dennis Ferber said, according to the suit filed in Brooklyn Federal Court.

Not surprisingly, the new mayor and new police chief didn't want this case to go very far, and got George to agree to a $125,000 settlement. Will victories like this get police to stop these kinds of things? Doubtful, but it's still good to see.

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]]>finishing-all-the-city's-businesshttps://www.techdirt.com/comment_rss.php?sid=20140819/17242728260Fri, 8 Aug 2014 17:38:31 PDTBig Silicon Valley Firms Aren't Going To Get Off That Easily For Their Anti-Poaching AgreementsMike Masnickhttps://www.techdirt.com/articles/20140808/15284628156/big-silicon-valley-firms-arent-going-to-get-off-that-easily-their-anti-poaching-agreements.shtml
https://www.techdirt.com/articles/20140808/15284628156/big-silicon-valley-firms-arent-going-to-get-off-that-easily-their-anti-poaching-agreements.shtmlagreed to settle a lawsuit concerning their collusive hiring practices, in which those companies (and a few others that had already settled) agreed not to "poach" employees from each other. As we had noted, these anti-poaching agreements (led by Steve Jobs who pushed them on many other companies) are a really hideous practice that is not only bad for the employees of those companies, but bad for innovation in general. As we've detailed, allowing the easy movement of employees between innovative tech companies is a huge part of why Silicon Valley became Silicon Valley. Employees shifting jobs between these companies often helps with greater idea sharing, different perspectives and speeds up innovation and (especially) big breakthroughs. It's almost an informal "open sourcing" of certain information, in which employees who are job hopping act as conduits of important information moving between companies in an informal manner.

That's why it's a very good thing that the practice is being called out and shamed -- and hopefully episodes like this can be put in the past. In our comments on the original settlement, however, many people pointed out that the $324 million actually seemed a little "light" given the number of employees involved. It would appear that Judge Lucy Koh agrees, and has rejected the settlement agreement as being too low, saying that the companies should try again with a higher number, starting at a minimum of $380 million.

The ruling also includes more details of how these agreements got started, showing Steve Jobs basically bullying lots of other CEOs -- and demonstrating just how scared everyone was of Jobs. They all seemed to fear going against him and having him declare "war" on them and going after their employees. Either way, it looks like the companies are going to have to cough up more money -- and hopefully this (again) means that this kind of anti-poaching practice is ended. Hopefully, these companies stop thinking just about how employees leaving hurt themselves, but about how they too can benefit from inbound employees.

In fact, there's a new book by Reid Hoffman, Ben Casnocha and Chris Yeh, called The Alliance, which, among other things, recommends that companies get much better about learning (1) how to let employees leave when it's in those employees' best interests and (2) how to keep a strong "alumni" network, recognizing that can benefit them in the long run. Hopefully the ideas like that, as well as all of the evidence on the importance of job shifting for enabling innovation, will mean these kinds of practices go away. I'm sure a bigger payout due to the lawsuit won't hurt either.

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]]>open-up-that-wallethttps://www.techdirt.com/comment_rss.php?sid=20140808/15284628156Mon, 12 May 2014 09:03:00 PDTGoldieblox Agreed To Pay Charity $1 Million For Using Beastie Boys' GirlsMike Masnickhttps://www.techdirt.com/articles/20140511/06592527192/goldieblox-agreed-to-pay-charity-1-million-using-beastie-boys-girls.shtml
https://www.techdirt.com/articles/20140511/06592527192/goldieblox-agreed-to-pay-charity-1-million-using-beastie-boys-girls.shtml
Back in March, we noted briefly that the Beastie Boys and Goldieblox had settled their big legal dispute, over Goldieblox doing a commercial that included a parody of the Beastie Boys' song "Girls." We still strongly believe that this was a clear cut case of fair use, but the whole case got more emotionally complicated by the Beastie Boys general prohibition on the use of its songs in advertising, including Adam Yauch putting in his will that his music can not be used in ads. Legally, that statement has no bearing on the fair use analysis, but to many people, to ignore those wishes still felt pretty damn icky. Goldieblox appeared to fairly quickly realize that they were losing the war of public perception and capitulated.

However, the terms of the "settlement" were kept secret -- until now. And that's only because in a different legal fight between the Beastie Boys and Monster Energy Drink involving a Monster Energy Drink event where DJs played tribute to the Beastie Boys the day after Yauch passed away. The specifics of that case really aren't that important, but a recent filing in that lawsuit, concerning a "reasonable" licensing amount, also happens to reveal the settlement terms of the Goldieblox settlement (via Eriq Gardner):

The GoldieBlox
Settlement granted GoldieBlox a retroactive license to use the musical composition of “Girls”
between November 18, 2013 and November 28, 2013.... In exchange, GoldieBlox agreed
to make annual payments of 1% of its gross revenue, until the total payments reached $1 million,
to a charitable organization chosen by the Beastie Boys and approved by GoldieBlox which
supports “science, technology, engineering and/or mathematics education for girls.” ... The
parties also agreed to make certain, specifically worded public statements... and to keep the settlement confidential, with certain exceptions, including its use in litigation.

While $1 million donated to a charity that focuses on "science, technology, engineering and/or mathematics education for girls" is certainly a good thing, and settling this fight amicably is a good resolution, it's still somewhat disappointing. Again, the original usage was almost certainly fair use, and I always worry when people diminish fair use, or assume that there can be no fair use in commercial cases. That's simply untrue, and agreeing to pay $1 million, even to charity, for a clear fair use, which was online for just 10 days, did nothing to harm the original song (and, in fact, brought a lot more attention to some important ideas), seems like an unfortunate result.

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]]>fair-use-gets-priceyhttps://www.techdirt.com/comment_rss.php?sid=20140511/06592527192Tue, 18 Mar 2014 07:11:18 PDTGoogle And Viacom Finally Settle The Big YouTube LawsuitMike Masnickhttps://www.techdirt.com/articles/20140318/07002626609/google-viacom-finally-settle-big-youtube-lawsuit.shtml
https://www.techdirt.com/articles/20140318/07002626609/google-viacom-finally-settle-big-youtube-lawsuit.shtmllosing pretty badly at nearly every step of the process -- and YouTube is considered so completely legit at this point that the more Viacom fought, not only did it look worse and worse, but at least some of the legal geniuses there must have realized that the court was going to wipe the floor so clean with them that rulings they really didn't like were going to be written and used as precedents for other innovative services.

The terms of the settlement are not public, but in this case, it likely doesn't much matter. I'd be surprised if much (or any) money changed hands (Update: Yup, it appears no money changed hands). Both companies spent many, many, many millions of dollars in the lawsuit to date, and it clearly made sense to stop it from going any further (especially from Viacom's standpoint, because it was pretty clear that it was going to lose really badly). While this means there won't be a useful Supreme Court ruling that reinforces the DMCA's safe harbors, the initial victories by Google in the lower courts should have enough precedential value to be useful in many other cases.

In the end, Viacom wasted more than seven years fighting YouTube in this particular case, and not a single court seemed to think particularly highly of its theories. Its closest "victory" in the process still involved the appeals court more or less rejecting every one of Viacom's theories. If I'm a Viacom shareholder (and, thankfully, I'm not), at this point I'm asking why the company spent so many years and so much money trying to sue one of the most popular and useful distribution platforms out there.

In the end, the case is perhaps one of the most perfect examples of how old media reacts badly to new innovations and immediately reaches for the only real tool in its toolbox against disruptive innovation: flailing about angrily in the court system, hoping to kill the innovation. Thankfully, seven years later, this process has finally been put to bed.

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]]>about timehttps://www.techdirt.com/comment_rss.php?sid=20140318/07002626609Thu, 17 Oct 2013 11:49:56 PDTIsoHunt Agrees To Shut Down And 'Pay' $110 MillionMike Masnickhttps://www.techdirt.com/articles/20131017/10532524916/isohunt-agrees-to-shut-down-pay-110-million.shtml
https://www.techdirt.com/articles/20131017/10532524916/isohunt-agrees-to-shut-down-pay-110-million.shtmlhave "settled" the case with IsoHunt agreeing to "pay" $110 million and shut down. Of course, IsoHunt won't pay $110 million. In court recently, even the MPAA's lawyers admitted that IsoHunt would be dead if the court awarded as little as $2 million. But, the MPAA wants that bogus $110 million number to throw around, just as they wanted to toss around the $105 million that Limewire settled for a couple years ago.

Of course, even if IsoHunt did pay that kind of money, how much would go to artists?

Unfortunately, there were many, many problems with the IsoHunt case in the first place. It was a clear case of bad facts making bad law -- or what Eric Goldman has referred to as the difference between real law and file sharing rule. It's clear, for example, that there was a tremendous amount of infringement done via IsoHunt. But there are serious questions about whether or not the liability for that should fall on IsoHunt as a torrent search engine. IsoHunt remains really the only significant case where the court has accepted Hollywood's bizarre interpretation of "red flag knowledge" in copyright infringement. And, really, that's why the MPAA wanted so damn badly to get this case finished without an appeal.

Now, unfortunately, the MPAA can continue to point to the rulings in IsoHunt, including many of the more problematic claims around inducement liability and red flag knowledge, knowing that they can't be directly challenged in that case any more. You can understand why IsoHunt settled. The company had already lost the key fights, and it was going to get hit with a giant sum to pay no matter what -- clearly more than it could ever pay. So why go through the process of continuing the court fight, when a settlement just gets it over and done with? At that point, the quibble is just about what bogus number the MPAA gets to lead the press release with, and $110 million was apparently the winning ticket. It wouldn't have made a difference if it was $1.1 million or $1.1 billion, the result is basically the same.

Amusingly, Chris Dodd is out there claiming that this is some sort of victory for innovation:

"Today’s settlement is a major step forward in realizing the enormous potential of the Internet as a platform for legitimate commerce and innovation,” said former Sen. Chris Dodd, chairman and chief executive of the MPAA. “It also sends a strong message that those who build businesses around encouraging, enabling, and helping others to commit copyright infringement are themselves infringers, and will be held accountable for their illegal actions.”

Of course, it does nothing of the sort. If the shutting down of Napster, Grokster, Aimster and Limewire failed to make that point, why will IsoHunt's shutdown and unpayable fine make that point any stronger? Either way, I'll have a bit more on this case soon, once I've had a chance to rewrite that other post in light of this latest turn of events.

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]]>which-will-never-get-paidhttps://www.techdirt.com/comment_rss.php?sid=20131017/10532524916Tue, 4 Dec 2012 23:57:00 PSTJudge: Apple / HTC Patent Agreement Must Be Revealed (Except For Dollar Amount)Mike Masnickhttps://www.techdirt.com/articles/20121204/14072921224/judge-apple-htc-patent-agreement-must-be-revealed-except-dollar-amount.shtml
https://www.techdirt.com/articles/20121204/14072921224/judge-apple-htc-patent-agreement-must-be-revealed-except-dollar-amount.shtmlsettling their ongoing patent dispute, and the subsequent request by Samsung to see the details, which were being kept confidential. It wasn't so much the amount paid that interested Samsung, but which patents were included in the settlement. That's because, in the Apple/Samsung case, Apple has argued that it would never license some of its patents, and thus there should be an injunction banning the sale of certain Samsung devices. However, if those same patents are found in the HTC agreement... then Samsung can point out that, not only is Apple lying to the court, but that an injunction should be off the table. That's because the law suggests injunctions only make sense when there is "irreparable harm." And if you can just pay up the missed license fees, then it's clearly not "irreparable."

The court quickly granted Samsung's request and has now gone a step further, saying that the agreement itself should be made public, except for pricing and royalty terms. Bizarrely, it was actually Samsung who sought to have the information about what patents were included under seal -- such that it could see it, but the public could not. Either way, the judge has made it clear that the patents need to be made public as there's no compelling interest in keeping them secret.

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]]>so-we-shall-seehttps://www.techdirt.com/comment_rss.php?sid=20121204/14072921224Mon, 12 Nov 2012 03:21:49 PSTHTC And Apple Settle Patent Dispute; Perhaps Tim Cook Realizes Patent Fights Are A WasteMike Masnickhttps://www.techdirt.com/articles/20121112/00494121010/htc-apple-settle-patent-dispute-perhaps-tim-cook-realizes-patent-fights-are-waste.shtml
https://www.techdirt.com/articles/20121112/00494121010/htc-apple-settle-patent-dispute-perhaps-tim-cook-realizes-patent-fights-are-waste.shtmlagainst HTC, who quickly sued back. However, over the weekend, the two companies announced a settlement in which they're cross-licensing all of their patents to each other for a period of ten years. While the full details are secret, all of the indications are that HTC is paying Apple, but not a huge amount. HTC has said that it won't have "an adverse material impact" on its financials. While HTC remains a smaller player than Samsung, one hopes that this is actually a sign that Tim Cook has realized that Steve Jobs' infatuation with killing Android in court is not a productive strategy. This, of course, won't end many of the other patent fights around smartphones, but hopefully it shows that Apple has become less ridiculously "religious" about fighting in court, rather than focusing on the marketplace.

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]]>one-would-helphttps://www.techdirt.com/comment_rss.php?sid=20121112/00494121010Tue, 30 Oct 2012 15:59:42 PDTUniversal Music Settles Key Fight Over Eminem Royalties... With Secret AgreementMike Masnickhttps://www.techdirt.com/articles/20121030/14173020888/universal-music-settles-key-fight-over-eminem-royalties-with-secret-agreement.shtml
https://www.techdirt.com/articles/20121030/14173020888/universal-music-settles-key-fight-over-eminem-royalties-with-secret-agreement.shtmlwon on appeal. That resulted in a somewhat insane and contentious fight over how much Universal would have to pay up, with a judge slamming Universal for hiding revenue with tricky funny money accounting, and even trying to expense the cost of this very lawsuit back against what they owed.

However, the damages phase of the case was set to go to trial in the spring, and it would have (1) revealed an awful lot about the blackbox of Universal Music's accounting practices and (2) given a roadmap for the many other similar lawsuits against Universal Music (and the other major labels). Given that, it should come as no surprise that Universal Music scrambled to come up with a way to get FBT to settle... with the terms of the settlement being secret. This almost certainly means that UMG paid through the nose, with the hope that it makes it more difficult for other artists to get similar rewards, and while allowing Universal to keep its secrets secret... for now.

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]]>of-coursehttps://www.techdirt.com/comment_rss.php?sid=20121030/14173020888Tue, 9 Oct 2012 11:33:01 PDTCopyright Maximalists Can't Help But Inject Bogus 'Copyright Wins!' Argument Into Google/Publisher SettlementMike Masnickhttps://www.techdirt.com/articles/20121009/02020920658/copyright-maximalists-cant-help-inject-bogus-copyright-wins-argument-into-googlepublisher-settlement.shtml
https://www.techdirt.com/articles/20121009/02020920658/copyright-maximalists-cant-help-inject-bogus-copyright-wins-argument-into-googlepublisher-settlement.shtmlsettlement concerning book scanning by Google and a variety of book publishers, the Copyright Clearance Center issued one of the more ridiculous statements concerning the situation, in which they basically read into the agreement something that was never there:

"Today's news not only further establishes the value of copyright, but also points to the importance of working with rightsholders when undertaking mass digitization. Collaboration is key when it comes to copyright."

First of all, nothing in the seven-year fight or the settlement helped to "establish the value of copyright." Quite the contrary. It seemed to show what a disaster copyright is today in that it could be used to delay the creation of an amazing resource for the world through highly questionable copyright claims. As for the argument that it's important to "work with" rightsholders when doing things like this, that too is misleading. All it showed is how those rightsholders can hold up the useful creation of such a resource -- and highlight why "permission society" is holding back innovation and better tools for learning and education.

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]]>seriously?https://www.techdirt.com/comment_rss.php?sid=20121009/02020920658Thu, 6 Sep 2012 12:12:00 PDTJudge Quickly Approves Ebook Pricing Settlement; Says It's In The Public Interest To Stop Price FixingMike Masnickhttps://www.techdirt.com/articles/20120906/11274320303/judge-quickly-approves-ebook-pricing-settlement-says-its-public-interest-to-stop-price-fixing.shtml
https://www.techdirt.com/articles/20120906/11274320303/judge-quickly-approves-ebook-pricing-settlement-says-its-public-interest-to-stop-price-fixing.shtmlapproving the DOJ's settlement with three book publishers in its antitrust lawsuit over ebook pricing. While there had been some concerns about the settlement, the judge saw no problem with it at all, and very quickly issued an order approving the settlement (pdf) between the government and HarperCollins, Simon & Schuster and Hachette (the case against others, and Apple continues). The terms of the settlement are straightforward:

They must terminate their Agency Agreements with Apple
within seven days after entry of the proposed Final
Judgment.

They must terminate those contracts with e-book retailers
that contain either a) a restriction on the e-book
retailer’s ability to set the retail price of any e-book,
or b) a “Price MFN,” as defined in the proposed Final
Judgment, as soon as each contract permits starting thirty
days after entry of the proposed Final Judgment.

For at least two years, they may not agree to any new
contract with an e-book retailer that restricts the
retailer’s discretion over e-book pricing.

For at least five years, they may not enter into an
agreement with an e-book retailer that includes a Price
MFN.

Cote basically said that this is a perfectly straightforward price fixing case, and the settlement directly counteracts the price fixing issues, so there's no reason not to just move forward with it.

The Complaint and CIS provide a sufficient factual
foundation as to the existence of a conspiracy to raise, fix,
and stabilize the retail price for newly-released and
bestselling trade e-books, to end retail price competition among
trade e-books retailers, and to limit retail price competition
among the Publisher Defendants. Although the Government did not
submit any economic studies to support its allegations, such
studies are unnecessary. The Complaint alleges a
straightforward, horizontal price-fixing conspiracy, which is
per se unlawful under the Sherman Act....
The Complaint also details the defendants’ public statements,
conversations, and meetings as evidence of the existence of the
conspiracy. The decree is directed narrowly towards undoing the
price-fixing conspiracy, ensuring that price-fixing does not
immediately reemerge, and ensuring compliance. Based on the
factual allegations in the Complaint and CIS, it is reasonable
to conclude that these remedies will result in a return to the
pre-conspiracy status quo. In this straightforward price-fixing
case, no further showing is required.

Because of this, Cote rejects the idea of any evidentiary hearing and just approves the deal. She notes that due to tons and tons of public comments that were allowed in the case, she is quite well informed of the issues and sees no additional benefit from such a hearing:

It is not necessary to hold an evidentiary hearing before
approving the decree. Given the voluminous submissions from the
public and the non-settling parties, which describe and debate
the nature of the alleged collusion and the wisdom and likely
impact of settlement terms in great detail, as well as the
detailed factual allegations in the Complaint, the Court is
well-equipped to rule on these matters. A hearing would serve
only to delay the proceedings unnecessarily.

She does try to summarize the comments against the settlement into four broad categories: (1) that the settlement would harm third party players like indie book stores, indie ebook retailers, indie publishers and authors, (2) that the settlement is "unworkable," (3) that there weren't enough facts to support the price fixing claim, (4) that the impact of such price fixing was actually pro-competition, in that it broke up Amazon's market dominance. She then breaks down each of these arguments to show why none of them apply and the settlement should move forward.

I won't go through all four issues, but I would like to focus on the two that get the most attention, the first and the last. On the first issue, she points out that antitrust law is not designed to protect businesses from the working of the market, but to protect the public from the failure of the market. If the settlement causes some businesses to suffer, but it's in the public interest, there is no problem there.

If unfettered e-books retail
competition will add substantially to the competitive pressures on physical bookstores, or if smaller e-book retailers are
unable to compete with Amazon on price, these are not reasons to
decline to enter the proposed Final Judgment.

As for the last issue (breaking up Amazon's dominance), she notes that it was "perhaps the most forceful species of criticism" but still does not find it persuasive here. The court more or less notes that Amazon's market position isn't on trial, and its use of wholesale pricing does not equal price fixing, as some have alleged. Nor does it show "predatory" pricing, which was a key complaint. The problem there: the evidence showed that Amazon was "consistently profitable." And, to show predatory pricing, "one must prove more than simply pricing below an appropriate measure of cost" but also that the company will jack up prices down the road. And all of the comments failed to do that:

None of the comments demonstrate that either
condition for predatory pricing by Amazon existed or will likely
exist. Indeed, while the comments complain that Amazon’s $9.99
price for newly-released and bestselling e-books was
“predatory,” none of them attempts to show that Amazon’s e-book
prices as a whole were below its marginal costs.

Oh, and finally, the court points out that swinging back the blame to Amazon is meaningless for the purpose of this case, anyway, because even if the court accepted that Amazon was price fixing too, that doesn't make it okay for the publishers to price fix themselves. Think of it as the "two wrongs don't make a right" rule.

Third, even if Amazon was engaged in predatory pricing,
this is no excuse for unlawful price-fixing. Congress “has not
permitted the age-old cry of ruinous competition and competitive
evils to be a defense to price-fixing conspiracies.” ... The familiar mantra regarding
“two wrongs” would seem to offer guidance in these
circumstances.

This probably does not bode well for the other publishers and Apple who are fighting the whole thing...

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]]>will-prices-drop?https://www.techdirt.com/comment_rss.php?sid=20120906/11274320303Thu, 30 Aug 2012 20:02:00 PDTFirst Round Of Ebook Price Fixing Settlements Are AnnouncedZachary Knighthttps://www.techdirt.com/articles/20120830/13190220221/first-round-ebook-price-fixing-settlements-are-announced.shtml
https://www.techdirt.com/articles/20120830/13190220221/first-round-ebook-price-fixing-settlements-are-announced.shtmldecided to settle rather than fight. Now, the first round of settlements have been reached between these three companies and 49 states (sorry Minnesota) and 5 US territories. The settlement totals to around $69 million to be split among the states and territories.

In a press release on this settlement, Connecticut AG George Jepson states that while it is fine for companies to seek profit, they shouldn't harm the public in the process.

While publishers are entitled to their profits, consumers are equally entitled to a fair and open marketplace. This settlement will provide restitution to those customers who were harmed by this price-fixing scheme, but it also will restore competition in the eBook market for consumers’ long-term benefit.

By restoring competition in the market, these publishers agree to allow retailers pricing control of ebooks in the future. This could bring us back to $10 and below new releases that we have sorely missed.

While this settlement is getting underway, the settlement between these companies and the DOJ is still being reviewed. That may take a while as District Court Judge Denise Cote has 868 public comment letters to sift through. Hopefully, she can ignore the ignorant pleas of those opposed to the current settlement proposal and agree to a positive result. All that would be left is that actual lawsuit against Apple, Macmillan and Penguin which are all holding their ground that they did nothing wrong.

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]]>when-crime-does-eventual-payhttps://www.techdirt.com/comment_rss.php?sid=20120830/13190220221Mon, 13 Aug 2012 17:00:00 PDTDailyDirt: Simulations For Living On MarsMichael Hohttps://www.techdirt.com/articles/20100914/12125011005/dailydirt-simulations-living-mars.shtml
https://www.techdirt.com/articles/20100914/12125011005/dailydirt-simulations-living-mars.shtmlMars500 project -- and the unforgettable original Total Recall movie. Here are just a few more Martian simulations if you need some help escaping from the realities of Earth.